London has climbed to second in the Schroders Global Cities index, after falling from the top spot last year.
The index, which ranks cities based on economic, environmental, innovation and transportation factors, aims to identify the top cities in the world for business.
San Francisco took the number one spot for the second year in a row, thanks to its dominant start-up and venture capital ecosystem, spurred by a new wave of AI investment.
After falling to third last year, London still struggled to surpass San Francisco due to slower household income growth, Schroders said.
Manchester was the only other British city to rank in the top 30, supported by high environmental score due to a cooler climate and low exposure to natural hazards, combined with strong net zero policies that feature specified emission reduction targets.
Meanwhile, Chinese cities faced a tough year, with only Shenzen and Shanghai remaining in the top 30, at 17th and 24th respectively. Beijing and Hangzhou both dropped out of the top 30.
In contrast, the United States pushed ahead, especially in Texas. Houston rose over 40 places from 61st to 14th, Dallas rose from 58th to 20th, and Austin from 45th to 34th.
This was spurred by high migration to the state during the coronavirus pandemic, along with a combination of low personal tax regimes, attractive weather, and strong job creation.
Hugo Machin, portfolio manager at Schroders Global Cities, said: “This year’s clear winners are the larger US cities such as Houston and Dallas, which have benefitted from a re-appraisal of the transport score used in the rankings.
“This year, the index places less weight on walk time and more on overall transport time as we believe cities should take a holistic approach to organising urban transport.
“Moreover, whilst it will hardly be a revelation to many, data continues to indicate that wealthy citizens are continuing to move to locations that have low crime rates and tax thresholds. This is why Austin, Miami and Charlotte have grown strongly in recent years, with Austin now home to more Fortune 500 companies than any other location in the US.”
Location2023 Rank2022 Score2022 RankSan Francisco18.851London28.703San Jose (US)38.547Hong Kong48.359Boston58.752Seattle68.3412New York78.684Melbourne88.615Singapore98.408Paris108.3510
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